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Chancellor Applauds Fin Tech

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Rt Hon George Osborne MP

Chancellor of the Exchequer George Osborne MP said;

 I want the UK the lead the world in developing Fin Tech.

We are the world’s leading financial capital.

We have among the best scientific research; one of the greatest tech hubs in the world, near here in Tech City; and the highest density of start-ups in the world.

And with the right backing from government, I believe we can make London the Fin Tech capital of the world. For me this is not an add-on to what the City already does.

It has to be what the City becomes in the future.

And that means much much more than just viewing your statement online.

It means being able to bypass traditional banks altogether, and lend money directly – through peer-to-peer platforms like Funding Circle and Zopa, both represented here today.

It means being able to wire money around the world without paying high fees –through technologies like Transfer Wise.

It means being able to analyse how you’re spending your money, being able to transfer it directly to a friend or relative, even managing your kids’ allowance on your phone – which you can now do with services like Meniga, Pay-M, and Yoyo.

Of course it’s not just about personal banking. Fin Tech will transform the way we do business, and UK companies are already leading the way.

There is fierce international competition for this growing industry. And you need the right support from government to win this global race – you need the best investment environment, the right tax system, the appropriate regulatory rules, the best infrastructure, and a government that gets out there in the world and sells your products and services.

And I’m here today to announce new measures to back you in all these areas.

The British Business Bank has already committed over £100 million of new funding to Fin Tech companies and to the development of new and innovative forms of finance.

But I want it to go much further. So today I can announce I am extending the scheme with another £100 million.

That’s a huge new investment in companies like yours – which will have benefits for businesses in all sectors of our economy.

Today’s commitment is part of a massive programme of investment in science and research which I have made a personal priority of mine in Government. And to make sure that we stay ahead of the game – and we are prioritising investment to support the FinTech industry – I am today asking one of our best scientists, the Government’s chief scientific advisor, Sir Mark Walport, to lead a review into the future of FinTech and what more we can do to back you.

That’s investment.

We’ve already introduced legislation so FinTech companies can get access to credit data on small businesses, can access Payments Systems, and can compete more effectively in business lending. Today I can announce that as part of the first ever Small Business Bill going through parliament, this government will legislate to require the big UK banks to pass on information on small businesses they reject for loans, so that FinTech Companies and alternative lenders can step in and offer finance instead.

So often a small business will be suitable for finance, but 70% only approach one bank and nearly 40% give up at the first attempt. Meaning many businesses just don’t get the finance they need.

No more. This legislation will bring a whole wave of new lenders much closer to the small businesses they serve.

And I am pleased to announce a new partnership between Innovate Finance and the British Business Bank to champion FinTech and the opportunities it creates for small businesses to access the finance they need.

And the FCA has committed to open its doors to financial service firms who are developing new approaches, to help them navigate the regulatory system and identify areas where the regulatory system needs to adapt to new technology.

These are positive developments that I hope will help us create the right, pro-innovation regulatory environment

And recognising that the world of finance as we know it is changing in front of our eyes, I can today announce that the Government will start a major programme of work exploring the potential of virtual currencies and digital money.

These alternative payment systems are popular because they are quick, cheap, and convenient – and I want to see whether we can make more use of them for the benefit of the UK economy and British consumers. I also want to be alert to the risks that accompany any new technology.

So I’m kicking off this programme of work today.

Among other things it will look into whether regulation of the sector is required, so that virtual currency business can continue to set up in the UK, and for people and businesses to use them safely.

Third, we’re backing you and the whole British economy with the digital infrastructure we’re going to need if Britain is to grow and succeed in the long term.

We’re rolling out 4G and superfast broadband now.

We’ve set out a new, more flexible Spectrum Strategy which will support the Internet of Things.

The final thing we need, for the UK to be the global FinTech capital, is a government that gets out there in the world – that uses our extensive network of embassies and trade delegations – to sell what you do.

So I have asked UK Trade & Investment to make this a priority.

And today we are launching their campaign to make the UK the destination of choice for setting up a FinTech company. And to encourage companies around the world to come here as the springboard for internationalising their FinTech business.

My message today is simple:

We stand at the dawn of a new era in banking.

Mobile banking apps, peer to peer lending, virtual currencies – technologies such as these are going to transform our lives, and create huge economic opportunities.

That’s how we’re going to make the UK the FinTech capital of the world – as part of our long term economic plan to cement Britain’s position as the centre of global finance and global technology.

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